Parliament passes 2024 budget, opposition slams it

Hungary’s parliament approved the government’s 2024 budget in a final vote on Friday. Opposition parties slammed the budget.

The budget was passed with 121 votes in favour and 44 against.

In the general debate, Finance Minister Mihály Varga qualified the budget as a “defence budget”, saying that in times of war Hungary must guarantee its security, protect families, pensions, jobs and maintain low utility costs.

The budget assumes a GDP growth rate of 4 percent, an annual average inflation rate of 6 percent and targets a fiscal deficit of 2.9 percent of GDP.

Central reserves amount to HUF 220 billion (EUR 573.1 million), and the cabinet aims to spend any additional revenues generated by higher than expected economic growth towards further reducing the public debt.

The budget targets a year-end public debt-to-GDP ratio of 66.7 percent.

It targets revenue of HUF 38,240 billion and expenditures of HUF 40,755 billion. The deficit target is HUF 2,514 billion.

The operating budget will have revenue and expenditures of HUF 34,150 billion.

The budget targets expenditures related to EU-funded developments of HUF 3,605 billion, while transfers from Brussels for those programmes are set to reach HUF 2,479 billion, with a deficit of HUF 1,125 billion.

Expenditures on debt servicing are targeted at HUF 3,144 billion, up from HUF 2,541 billion in the 2023 budget.

The budget allocates HUF 1,340 billion for the utilities protection fund as against this year’s HUF 2,579 billion, with HUF 917 billion to be earmarked for keeping household utility prices low. Central budget support for the fund is set at HUF 483 billion, while payments, contributions and windfall profit taxes from companies in the energy, mining, telecommunications, airline and pharmaceutical sectors will cover the rest of the fund’s expenditures.

The budget earmarks HUF 1,309 billion for the defence fund, up from this year’s HUF 842 billion, increasing Hungary’s total defence spending to more than NATO’s required 2 percent of GDP.

After submitting the draft budget to parliament, Varga said more than HUF 3,300 billion will be channeled to support families. More than HUF 3,430 billion are allocated for education and over HUF 6,500 billion are set aside for pensions.